“Unlike many of the our competitors that have delayed or deferred we’re very confident its going to be a great performer for us.” The daily B777 service between Pudong and Newark Liberty begins March 25th.
“With a lot of the freighter reductions happening in the Asia region we still think there is a lot of opportunities there for us for our premium express products because that is really what continental cargo is about. We really have a penchant for deliver as promised service for premium express services,” Randgaard said. Continental Cargo is also preparing to tap the surging pharma business out of the Shanghai market.
“We have existing flights into Beijing and also Hong Kong from Newark that are successful and have been consistently proven performers, so we think it will play well at Shanghai as well.”
Part of his confidence lies in what he says is a cost advantage in being a combination carrier, particularly in view of the weak sentiment in the cargo market.
“With the financial meltdown and lack of overall confidence in the cargo market, going in with combination services is a real cost advantage and I think that is the way to go as far as entering the China market right now. “
Continental Cargo is currently doing up to nearly 44 tonnes of cargo on its existing routes with the B777 – “that aircraft is a powerhouse for the market,” he added. But as confident as the carrier is of its key cargo markets, there is no escaping what seems to be the unending downward spiral in the global economy.
Continental’s latest traffic statistics showed its cargo revenue ton miles declining 23.3 per cent to 63.12 million in January 2009 from 82.23 million in the year-ago month.
Its consolidated traffic declined 11 per cent to 6.43 billion revenue passengermiles or RPM from 7.22 billion RPM in the prior year period and passenger loadfactor decreased 3.6 points.
Mainline traffic declined 10.8 per cent to 5.78 billion from 6.48 billion. Domestic traffic slid 14.6 per cent to 2.85 billion from 3.33 billion while international traffic fell 6.7 per cent to 2.93 billion from 3.15 billion in the same period last year.
Mainline capacity fell 6.7 per cent to 7.81 billion from 8.37 billion in the yearago month, while its international capacity declined 2.2 per cent to 4.09 billion from 4.19 billion in the corresponding period last year.
Aside from its China expansion, the carrier has been expanding services to two other key, high yield markets: Latin America and Europe.
“We’re seeing double digit growth out of Latin America and that’s one of our premier markets,” he said.
“We started a second Bogata Columbia flight with a narrow body in September and that’s been a good market for us,” he said. The carrier now has a double daily to Bogata out of Newark as well as servicing that market out of Houston.
And it added a second Houston to Rio de Janeiro, Brazil for its winter schedule in addition to year-round service which was given a boost as well. Randgaard says both Sao Paolo and Rio are “prime markets”. “And Buenos Aires is also a dynamic market, where planes are packed with cargo. We do extremely well coming out with perishables and big pharma. We definitely see high yield opportunities there,” he added.
Europe is also big for Continental, according to Randgaard. With the opening up of slots at Heathrow, the carrier pulled out of Gatwick and now has three daily nonstop from Newark to London and double daily from Houston.
“It’s a solid market for us. When we started last March we increased our pallet capacity by about 28 per cent when we went in. We’re bullish on Heathrow – it’s where the business traveller wants to go and it’s also awesome for interline connected cargo,” he said.
Last year, despite the eight-week long Boeing strike that paralysed aircraft deliveries, Continental took delivery of 26 737 next generation aircraft that it placed on domestic US and Latin American routes.
The aircraft replaced nearly 40 of the carrier’s ageing class 737-300s and -500s. Giving an extra 2.7 tonnes of payload, the new planes are far more fuel efficient and also have an extra 500 nautical miles of range over the classics.
The carrier will take delivery of two more B777s in 2010 and more significantly, has a firm order for 25 B787 Dreamliners which he describes as “game changers” for the carrier. “The 787s are going to be the future of Continental.”